FirstCry Shares Debut High on Stock Market

Shares of FirstCry made a strong debut on the stock market today, opening at ₹625, which is a significant 34.4% increase from its issue price of ₹465.

Brainbees Solutions, the company behind FirstCry, saw its shares rise even further, showing a 5.31% gain in early trading on August 13.

Market experts are noting that, while the initial excitement around FirstCry’s listing is evident, investors should be cautious. The company is facing several challenges, such as negative cash flows, regulatory issues, and increasing debt.

Akriti Mehrotra, a research analyst at StoxBox, pointed out that FirstCry has merged its online and offline platforms effectively, which helps with efficiency. Still, the company’s financial situation is worrisome. In the latest fiscal year, FirstCry’s revenue only grew by 15%, reaching ₹6,575.1 crores, while it incurred losses of ₹321.5 crores and saw its debt escalate from ₹176.5 crores to ₹462.7 crores.

Mehrotra explained that the funds being raised are mostly earmarked for operational needs, not for reducing debt. She advises investors allocated shares to consider cashing in on their profits given the current financial challenges facing the company.

Prior to its market debut, Brainbees Solutions successfully raised ₹1,885.8 crores from its anchor investors on August 5. Established in 2010, the company operates the popular FirstCry platform, which offers a wide variety of products for mothers, babies, and children, featuring over 1.5 million SKUs from more than 7,500 brands.

The IPO for Brainbees Solutions saw a remarkable response, getting subscribed 12.2 times overall. Retail investors showed good interest with a 2.3 times subscription rate, while Qualified Institutional Buyers (QIBs) subscribed at an impressive 19.3 times. Non-Institutional Investors (NIIs) also actively participated, achieving a subscription rate of 4.7 times.